Sam Bankman-Fried Faces Jail as DOJ Pushes for Incarceration – The U.S. Department of Justice stated once again that FTX founder Sam Bankman-Fried‘s defense doesn’t deny his sharing of former Alameda Research CEO Caroline Ellison’s diary with the New York Times. The DOJ is pushing for his detention pending trial, as they believe he went beyond making a “fair comment” when sharing the diary, amidst the ongoing back-and-forth between his attorneys and the prosecutors accusing him of massive financial fraud.
This marks the second filing from the DOJ and the third in the legal dispute. “The record here establishes that the defendant went beyond benignly exercising a constitutional right to speak to the press – he took covert steps intended to improperly discredit a trial witness and taint the jury pool,” the filing said.
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In its initial filing last Friday, the DOJ asserted that Bankman-Fried’s actions, such as using a virtual private network (VPN) to watch the Super Bowl (as claimed by the defense), contacting FTX.US General Counsel Ryne Miller, and now sharing Ellison’s diary with the Times, demonstrate his repeated attempts to “corruptly influence witnesses.” Prosecutors reiterated this argument in their filing on Thursday.
In their reply to the initial DOJ filing, Bankman-Fried’s attorneys argued that the government had been “mischaracterizing” the FTX founder’s actions to portray him negatively. According to their filing on Tuesday, the former exchange CEO’s intent was to protect his reputation when interacting with the press and that he did not initially initiate contact with Miller. Thursday’s filing from the DOJ implied that the defense team was misrepresenting Bankman-Fried’s actions.
According to the DOJ, Bankman-Fried had initially established Signal groups with messages set to delete after a week. Prosecutors also alleged that he played a role in creating a “media atmosphere” that elevated Ellison’s prominence before she became a witness. The DOJ’s filing even suggested that Bankman-Fried might have informed the New York Times about Ellison’s diary before sharing the documents with the news outlet.
“What is clear – regardless of whether the defendant was the first source for stories regarding Ellison – is that the defendant, rather than deny his guilt as he correctly now says it is his right to do, shared materials with the press obviously designed to intimidate, harass, and embarrass someone he knows is slated to testify against him, and to provoke an emotional response in potential jurors and color a potential juror’s view of that witness,” the filing said.
The filing also contains a footnote commenting on the defense team’s repeated mentions of current FTX CEO John J. Ray III, who took over to navigate FTX’s bankruptcy. “It is notable just how much of the defendant’s various letters focus on his interactions with or perceptions of John Ray, an individual who is not a witness in this case and whose communications have no relevance to any issue at stake here,” the filing said.
“The defendant’s arguments should be seen for what they are: an attempt to deflect from his own conduct by pointing at another person whom the defendant apparently views in a negative light.” Judge Lewis Kaplan, the Southern District of New York judge overseeing the case, may schedule another hearing to discuss the filings. According to Kenneth White, a former federal prosecutor and founding partner at Brown White & Osborn, the DOJ needs to persuade the judge that Bankman-Fried poses a threat to the community.
Engaging in actions like harassing or intimidating a witness would be part of the subset of concerns related to that assessment. “If the DOJ could convince the judge that Bankman-Fried isn’t going to obey judicial orders, and he’s going to keep trying to harass and abuse his ex, retaliate against her for testifying, try to influence her to not testify, and so forth, then that would be a basis for the judge to decide that he’s going to jail,” White said.